Investing.com - The Canadian dollar turned lower against the
U.S. dollar on Friday, paring some of the week's gains, after
official data showed that Canada's trade deficit widened
unexpectedly in November as exports fell.
USD/CAD hit 0.9814 on Friday, the pair's lowest since October 18;
the pair subsequently consolidated at 0.9845 by close of trade,
0.18% lower for the week.
The pair is likely to find support at 0.9814, Friday's low and a
three-month low and resistance at 0.9895, the high of December 20.
Statistics Canada said on Friday that November's trade deficit grew
to CAD1.96 billion, up from CAD552 million in October, the fourth
largest deficit on record. Economists had forecast a deficit of
CAD1 billion last month.
Imports rose 2.7% in November, while exports dropped 0.9% the
The data fuelled fears that Canadian economic growth would be
weaker than hoped in the fourth quarter.
In the U.S., official data showed that the trade deficit also
widened unexpectedly in November, growing to USD48.7 billion, the
biggest deficit since April. Imports climbed 3.8% to USD231.3
billion, while exports rose 1% to USD182.6 billion.
The Canadian dollar found support on Thursday after government data
showed that China's trade surplus widened unexpectedly in December,
adding to signs of recovery in the world's second largest economy.
Risk appetite was also boosted after the European Central Bank kept
interest rates unchanged at 0.75% and President Mario Draghi said a
gradual economic recovery would begin this year.
Some investors had expected the ECB to hint a possible rate cuts in
the coming months going into Thursday's policy meeting.
In the week ahead, investors will be anticipating a speech by
Federal Reserve Chairman Ben Bernanke on monetary policy and the
recovery from the global financial crisis on Monday, as well as
Tuesday's data on U.S. retail sales for December.
Data from China on fourth quarter gross domestic product and
industrial production will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, January 14
The Bank of Canada is to release its quarterly business outlook
survey, a leading indicator of economic health.
In the U.S., Fed Chairman Ben Bernanke is to speak at the
University of Michigan; his comments will be closely watched for
any indications on the future possible direction of monetary
Tuesday, January 15
The U.S. is to publish government data on retail sales, the leading
indicator of consumer spending, which comprises the majority of
economic activity, as well as official data on producer price
inflation. In addition, the U.S. is to release data on
manufacturing activity in New York state and a report on business
Wednesday, January 16
The U.S. is to produce government data on consumer inflation, in
addition to data on industrial production and the capacity
utilization rate. The country is also to publish official data on
crude oil stockpiles, while the Fed is to publish its Beige Book,
which looks at current economic conditions.
Thursday, January 17
Canada is to publish official data on foreign securities purchases,
which is linked to currency demand.
Elsewhere, the U.S. was to produce official data on building
permits, a leading indicator of future construction activity, as
well as data on housing starts. The U.S. was also to release the
weekly government report on initial jobless claims and data on
manufacturing activity in Philadelphia.
Friday, January 18
Canada is to publish official data on manufacturing sales, a
leading indicator of economic activity.
The U.S. is to round up the week with preliminary data from the
University of Michigan on consumer sentiment, a leading indicator
of consumer spending.
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